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NFL Betting: Playing FanDuel Or DraftKings Vs. Using Sportsbooks

Unless you've been in a cave this week, you know what's going on with those daily fantasy sites that pay out prize money. Here's why it's smarter to bet at sportsbooks than play at one of these sites.

One Day Drafts
If you didn’t know what fantasy sports was about before then you no doubt know now after a mind numbing number of commercials for Draft Kings and FanDuel. The craze has infatuated a young demographic of sports geeks, stat nerds and computer wonks who believe they know how to beat the odds. The legality of fantasy sports was the manifestation of a legal loophole in the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006. The same law that expressly prohibits gambling businesses from receiving bets over the Internet has a special section permitting money to be wagered on fantasy sports. When the bill was written it addressed season long and not daily fantasy leagues.

However where there’s a hole there is someone willing to fill it and in this case a few creative entrepreneurs found the loophole and voila – daily, not season long, fantasy sports was born and the money has been rolling in ever since. But it was only a matter of time before this burgeoning industry would be embroiled in their first scandal. An enterprising middle manager from Draft Kings mined the confidential data base on a fantasy football Sunday before the game commenced, which is a no-no, and created a team on FanDuel.com replete with all the sharp action in play. So now the government has perked up their ears and where this is headed is anybody’s guess.

Daily Fantasy Sites Under Fire
What came out this week was that a DraftKings employee won $350,000 in a daily fantasy contest on FanDuel essentially by using inside information to pick his NFL lineup in Week 3. On Monday, the New York Times reported that the employee, Ethan Haskell, admitted to leaking information about the players most frequently used in fantasy lineups on the site during Week 3. The data Haskell released is made public by the site after lineups have been finalized but can give players an advantage if obtained ahead of time. The thinking is that someone could use said information to spot market inefficiencies and improve his or her chances of winning against the group. It's essentially a sort of insider trading, which of course is illegal when you play the stock market.

Already there were some in Congress complaining that sites like FanDuel and DraftKings were running around unregulated thanks to a loophole in the gambling laws in the United States -- frankly, there's no way this isn't gambling but that's a story for another day. It's total hypocrisy that all the major U.S. sports leagues are against legalized gambling but that FanDuel and DraftKings have business relationships with the NFL, NFL owners Jerry Jones and Robert Kraft and Major League Baseball. Plus they advertise incessantly during games.

The fallout has been swift from this latest news. DraftKings pulled its advertising from ESPN on Tuesday. ESPN also had made a separate decision to scale back on DraftKings sponsorship graphics and language within its programming. ESPN spokesman Paul Melvin said this was being done to avoid the appearance of a conflict of interest. Also Tuesday, the New York attorney general opened an inquiry into whether employees from DraftKings and FanDuel won money using insider information.

On Wednesday, FanDuel announced that it had permanently banned its employees from playing on other fantasy sites -- I'm stunned they were even allowed to before. FanDuel is also implementing an internal advisory board that will be led by Michael Garcia, a former U.S. attorney. DraftKings announced it has hired a third-party law firm to review the findings of its investigation. Both companies had always banned employees from playing on their own sites.

Sportsbooks Offer Better Odds To Win

So should you play these sites compared to just betting on games or player props? Statistics say playing fantasy sites is almost a sure loser unless you are a whale. Bloomberg released a story in mid-September charting what type of players generally win the big football tournaments. The Top 100 ranked players enter 330 winning lineups per day, and the Top 10 players combine to win an average of 873 times daily. The remaining field of approximately 20,000 players wins just 13 times per day on average. Many of these sharks have their own statistical models and enter 1,000 times in weekly contests during the NFL season. Can you afford that entry fee? Do you have the time and resources to do that type of homework? Money-losing players tend to get lucky and win a few times, reinvest the prize money and eventually lose. A survey of more than 1,400 fantasy sports players conducted this summer found that 70 percent of participants had lost money. Just like at a brick-and-mortar casino, the house always wins eventually.

Isn't it smarter to bet on something closer to a 50/50 proposition like 'over/under' Tom Brady passing yards Sunday on NFL odds against the Dallas Cowboys? Or total catches by the Giants' Odell Beckham Jr. against San Francisco on NFL picks? It takes only a few minutes of research to figure trends of current players/teams instead of having to figure out an entire lineup. And you aren't playing against thousands of other players who also might have used Brady or Beckham. You are only playing the sportsbook. Your odds to win increase exponentially.

My favorite football bet is usually any game that has a line of under 2.5. Because if you pick the winning side, you rarely have to worry about the spread because most games end at least by a spread of 3 points. I always jump on pick'ems (basketball too) because of not having to worry about the final score.

These fantasy sites are going to be regulated heavily very soon -- there's little doubt about this. They probably aren't going away, but it's still wiser to stick to the sportsbooks.